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USDA - AMS: Weekly Cotton Market Review, narrative (2019-03-08)

USDA U.S. Department of Agriculture - March 8, 2019




Mp_cn812  
March 8, 2019 
Weekly Cotton Market Review
 



Spot quotations averaged 117 points higher than the previous week, according to the USDA, 
Agricultural Marketing Service’s Cotton and Tobacco Program. Quotations for the base quality 
of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 
81.0-81.9) in the seven designated markets averaged 68.17 cents per pound for the week ending 
Thursday, March 7, 2019. The weekly average was up from 67.00 last week but down from 80.48 cents 
reported the corresponding period a year ago. Daily average quotations ranged from a high of 69.00 
cents Tuesday, March 5 to a low of 67.50 cents Thursday, March 7. Spot transactions reported in 
the Daily Spot Cotton Quotations for the week ended March 7 totaled 100,649 bales. This compares 
to 66,537 reported last week and 49,573 spot transactions reported the corresponding week a year ago. 
Total spot transactions for the season were 767,750 bales compared to 1,603,021 bales the 
corresponding week a year ago. The ICE May settlement prices ended the week at 73.11 cents, 
compared to 72.82 cents last week. 


Southeastern Markets Regional Summary   


Spot cotton trading was slow.  Supplies and producer offerings were moderate.  
Demand was moderate.    Average local spot prices were higher. Trading of CCC-loan 
equities was inactive. 
     
A low pressure system moved across the lower Southeast over the weekend producing severe 
thunderstorms in areas across Alabama, Florida, Georgia, and South Carolina.  The storms 
caused an outbreak of over 30 tornadoes that were confirmed to have touched down in areas 
across the region.  The deadliest tornado was an EF-4 with estimated wind speeds of 170 mph 
which touched down in the Macon/Lee County areas of southeast Alabama.  Twenty-three 
fatalities were reported in Alabama, and 90 injuries in Alabama and Georgia from the tornado 
which carved a damage path of over 26 miles into Georgia.  Communities worked to recover 
during the week as homes and local public facilities were destroyed or sustained damage. 
Trees and power lines were downed and roads were impassable in many areas.  The storms 
deposited 1 to 2 inches of rainfall throughout the lower Southeast region.  No gin or 
warehouse damage was reported.  In Georgia, a few gins remained on gin days as they waited 
for the last modules to arrive from fields. 
     
Mostly overcast conditions prevailed across the upper Southeast as thunderstorms brought 
one-half of an inch to one inch of precipitation to areas throughout the Carolinas and Virginia 
throughout the week.  Daytime high temperatures varied from the low 40s to high 50s. Field 
activities were at a standstill.  A couple of gins remained on gin days in the Carolinas, 
but most gins had completed pressing operations for the season.  Producers considered planting 
options for the 2019-crop season. 
 
Textile Mill 

Domestic mill buyers purchased a moderate volume of color 51 and better, leaf 4 and better, 
and staple 34 and longer for April/May delivery.  Mill buyers also inquired for a moderate 
volume of color 51 and better, leaf 4, and staple 34 and longer for January through December 
2020 delivery.  No additional sales were reported.  Most mills operated five to seven days. 
Yarn demand was moderate. 
     
Demand through export channels was moderate.  Indonesian mill buyers inquired for a moderate 
volume of USDA Green Card class, color 31, leaf 3, and staple 36 for nearby shipment.  
Agents for mills in Taiwan inquired for a moderate volume of color 42, leaf 4, and staple 
35 for nearby shipment.  No sales were reported. 

Trading 
..
A heavy volume mixed lot containing color mostly 31, 41, and 51, leaf 3-5, staple mostly 36-38, 
mike 35-42, strength 27-30, uniformity 80-82, and containing approximately 50 percent extraneous 
matter sold for around 72.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression 
charges paid, 30 days free storage). 


South  Central Markets Regional Summary


North Delta 

Spot cotton trading was inactive.  Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were higher.  Trading of CCC-loan equities was inactive. No forward 
contracting was reported as merchants endeavored to clear existing inventory; producers continued 
to monitor commodity markets and international trade developments as they looked forward to the         
2019-crop season.   

A winter storm system early in the week brought severe weather to many areas.  Although less 
than 1 inch of accumulated moisture was reported, strong winds buffeted most of the region.  
River flood warnings remained in effect; the Mississippi River at Memphis was flowing at 41.5 
feet, more than 7 feet above flood stage, according to the National Weather Service.  More rain 
was in the forecast for later in the week.  Daytime temperatures dropped into the low 40s.  
Overnight lows plummeted into the 20s, well below historical averages.  No fieldwork was reported 
due to saturated soils and flood conditions.  The    Mid-South Farm and Gin Show in Memphis, 
TN was very well attended.   
 
South Delta 

Spot cotton trading was inactive. Supplies of available cotton were moderate.  Demand was light.  
Average local spot prices were higher.  Trading of CCC-loan equities was inactive. No forward 
contracting was reported as merchants endeavored to clear existing inventory; producers continued 
to monitor commodity markets and international trade developments as they prepared for the 2019-crop season.   
A winter storm system early in the week brought severe weather to many areas.  Although less than 
1 inch of accumulated moisture was reported, strong winds buffeted most of the region.  River 
flood warnings remained in effect; the Mississippi River at Greenville, MS was flowing at 44.2 feet,
 more than 7 feet above flood stage, according to the National Weather Service.  More rain was in 
the forecast for later in the week.  Daytime temperatures dropped into the low 40s.  Overnight 
lows plummeted into the 20s, well below historical averages.  Freeze warning were in effect to 
warn the public about significant damage to unprotected vegetation and early budding and blooming 
plants and trees.  No fieldwork was reported due to saturated soils and flood conditions.  
The Mid-South Farm and Gin Show in Memphis, TN was very well attended. Producers continued hoping 
for an extended period of warm, dry weather in order to prepare fields for timely spring planting; 
otherwise, corn acreage could be replaced with alternative crops.    

Trading 
  
North Delta 
..
No trading activity was reported. 

South Delta 
..
No trading activity was reported. 


Southwestern Markets Regional Summary      .


East Texas
 
Spot cotton trading was active.  Supplies and producer offerings were moderate.  Demand was 
moderate.  Average local spot prices were higher.  Producer interest in forward contracting 
was light.  Trading of CCC-loan equities was active.  Foreign inquiries were light. Interest 
was best from Indonesia, Taiwan, and Vietnam.    
     
Watering fields continued in the Rio Grande Valley.  Cotton planting was on hold until the 
cold fronts passed, and nighttime temperatures return to optimal ranges.  Fieldwork was 
delayed in south Texas. Daytime  temperature highs were in the low 40s to upper 70s and 
nighttime lows in the mid-30s to low 70s.  Producers were eager to begin planting, but most 
waited until ground temperatures warmed and soils firmed.  Rainfall brought up to 4 inches 
of beneficial moisture to the Upper Coast.  More rainfall was received in central Texas that 
brought good moisture to soil profiles and filled stock tanks.  Ginning was finalized and 
producers were focused on planting corn, which was delayed because of prolonged wet and cold 
conditions.  In Kansas, research data was released by Kansas State confirming that Palmer 
amaranth (pigweed) had developed resistance to 2,4-D and Dicamba technologies.  Topsoil 
moisture supplies were rated adequate to surplus, according to the National Agricultural 
Statistics Service’s Crop Progress and Condition report released on March 4.  Modules were 
abundant on and near gin yards.  Ginning continued, with occasional high wind interruptions.  
Ginning neared the end in Oklahoma.  Producers were focused on fieldwork and planting other crops.  
Planting seed was booked.  Pre-plant meetings were held.    
 
West Texas 

Spot cotton trading was active.  Supplies and producer offerings were moderate.  Demand 
was moderate. Producers monitored the market closely to determine marketing strategies 
for the remainder of the crop.  Average local spot prices were higher.  Producer interest in 
forward contracting was light.  Trading of CCC-loan equities was active.  Foreign inquiries 
were light.  Interest was best from Indonesia, Taiwan, and Vietnam.    
     
Fieldwork was intermittent with daytime high temperatures in the low 30s to low 80s, and 
overnight lows in the single digits to mid-30s.  Light, wintry precipitation was received 
early in the reporting period, which left light ice on roadways wherever the temperatures 
were below freezing.  Warmer and windy conditions returned mid-week.  Rainfall was in the 
nearby forecast.  Some areas, such as the panhandle, are very dry and need rainfall.  Fields 
were deep tilled to break the soil and manage weeds.  Fertilizer and herbicides were applied 
when wind speeds were within label tolerances.         

Trading 
 
East Texas 
..
In Texas, a light volume of mostly color 54 and better, leaf 6-8, staple 37, mike 45-50, 
strength averaging 28.4, uniformity averaging 79.4, and 50 percent extraneous matter sold 
for around 42.00 cents per pound, FOB warehouse (compression charges not paid). 
..
In Oklahoma, a heavy volume of mostly color 31, leaf 5 and better, staple 35 and longer, 
mike 37-46, strength 29-33, and uniformity 79-82 sold for around 71.00 cents, FOB car/truck 
(compression charges not paid). 
..
In Kansas, a moderate volume of mostly color 31 and 41, leaf 2 and 3, staple 34 and 35, 
mike 36-45, strength 26-29, uniformity 78-82, and 50 percent extraneous matter sold for 
around 63.25 cents, same terms as above.  
..
A heavy volume of CCC-loan equities traded for 8.25 to 14.75 cents. 

West Texas 
..
A heavy volume of mostly color 21 and 31, leaf 3 and 4, staple 36 and longer, mike 32-47, 
strength 26-29, and uniformity 77-82 sold for around 69.50 cents per pound, FOB car/truck 
(compression charges not paid).   
..
A mixed lot containing moderate volume of mostly color 32 and better, leaf 5 and better, 
staple 34-37, mike 28-51, strength 27-33, uniformity 77-82, and 25 percent extraneous 
matter sold for around 66.50 cents, same terms as above.   
..
A moderate volume of mostly color 21 and 31, leaf 3 and better, staple 32-35, mike 40-51, 
strength 26-31, uniformity 77-81,  and 25 percent extraneous matter sold for around 
60.50 cents, same terms as above.   
..
A heavy volume of CCC-loan equities traded for 6.50 to 14.00 cents. 


Western Markets Regional Summary 


Desert Southwest (DSW) 

Spot cotton trading was inactive.  Supplies and demand were moderate.   Average local 
spot prices were higher.  No forward contracting or domestic mill activity was reported.  
Foreign mill inquiries were light.  The on-going trade/tariff dispute between the US 
and China continues to slow inquiries and sales.       
     
Temperatures for Arizona were in the high 70s to low 80s.  No rainfall was recorded in 
the period.  Planting was active in Yuma, with over 50 percent of the crop in the ground 
as growers hurried to get cotton planted.  Rain delays pushed planting into March.  
Fieldwork was active in Safford, AZ; New Mexico, and El Paso, TX.  Producers were busy 
with building rows, pre-plant irrigations, and other fieldwork. Local sources reported 
a generous snowpack in Arizona.  The Salt River Project began releasing water from Bartlett 
Lake and Horseshoe Lake, due to melting snow which put the lakes at near full capacity.  
Water can be seen in the Salt River which runs through Phoenix.  This river is normally 
dry through the Valley.  The Gila River water supply will be in good shape for the Safford 
Valley.   Elephant Butte reservoir is at nearly 9 percent capacity; slightly higher than in 
December when the reservoir was measured at 5 percent.  The Elephant Butte Irrigation District 
usually releases water for a March allotment.  At this time, no word on when initial water 
allotments will begin. Ginning continued in Arizona.   
 
San Joaquin Valley (SJV)
 
Spot cotton trading was inactive.  Supplies and demand were light.    Average local spot 
prices were higher. No forward contracting or domestic mill activity was reported.  
Foreign mill inquiries were light.   
     
Daytime high temperatures were mostly in the 60s. Thunderstorms brought heavy rainfall 
and strong winds mid-week.  The south Valley received one inch of moisture, while the 
north Valley received around one-third of an inch.   The Sierra Nevada snowpack is growing 
as a recent storm pushed the statewide snowpack to 149 percent of the April average.  
SJV producers can begin planting as early as March 10, but the on-going wet weather and 
cold soil conditions will push planting into late March.  Fieldwork was limited.   
 
American Pima (AP) 

Spot cotton trading was moderate.  Supplies were moderate.  Demand was light.  Average 
local spot prices were steady.  No forward contracting or domestic mill activity was 
reported. Foreign mill inquiries were light.  Interest was best from Pakistan and Turkey.  
The on-going trade/tariff dispute between the US and China continues to slow inquiries and sales.   
     
Daytime high temperatures were in the 60s to 70s in the Far West.  Storms brought rain 
and strong winds to the San Joaquin Valley of California.  Precipitation amounts ranged 
from one-third of an inch to one inch for the SJV.  The California statewide snowpack is 
the healthiest in years for this time of year.  Planting was active in Yuma, AZ.  
SJV producers can begin planting at the earliest on March 10, but the on-going wet weather 
and cold soil conditions will push planting into late March.  Ginning was completed in 
Arizona, New Mexico, and El Paso, TX.  Ginning continued in California.   

Trading 
 
Desert Southwest 
..
No trading activity was reported. 

San Joaquin Valley 
..
No trading activity was reported. 
 
American Pima 
..
A moderate volume of color 3, leaf 3, and staple 48 and longer was sold to mills in Pakistan.   

 
USDA ANNOUNCES SPECIAL IMPORT QUOTA #20 
FOR UPLAND COTTON 
March 7, 2019 


The Department of Agriculture's Commodity Credit Corporation announced a special import 
quota for upland cotton that permits importation of a quantity of upland cotton equal to 
one week’s domestic mill use. The quota will be established on March 14, 2019, allowing 
importation of 12,619,815 kilograms (57,962 bales) of upland cotton.    

Quota number 20 will be established as of March 14, 2019, and will apply to upland cotton 
purchased not later than June 11, 2019, and entered into the U.S. not later than 
September 9, 2019. The quota is equivalent to one week's consumption of cotton by domestic 
mills at the seasonally-adjusted average rate for the period October 2018 through     
December 2018, the most recent three months for which data are available.  
     
Future quotas, in addition to the quantity announced, will be established if price conditions warrant.  






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